The son of an old merchant family, K’ung was educated in missionary schools in China and completed his education in the United States, where he received an M.A. in economics at Yale (1907). After returning to China, he became a friend of the Nationalist revolutionary leader Sun Yat-sen, who was married to Soong Ch’ing-ling (Song Qingling)—a sister of K’ung’s wife, Soong Ai-ling (Song Ailing). When Sun Yat-sen died in 1925, K’ung helped promote Chiang Kai-shek (Jiang Jieshi) to be leader of Sun’s Nationalist Party, even arranging Chiang’s marriage to Soong Mei-ling (Song Meiling), another sister of Soong Ai-ling.

In 1928 K’ung became minister of industry and commerce in the new Nationalist government. Five years later he succeeded his brother-in-law T.V. Soong as minister of finance and soon took China’s money off the silver standard and thus tied the Chinese economy to the international monetary system. That reform enabled China to survive the initial phase of the Sino-Japanese War (1937–45) without serious economic consequences.

K’ung succeeded Chiang Kai-shek briefly as president of the government in 1938, when Chiang resigned to devote all his time to prosecuting the war with Japan. Chiang resumed the presidency the following year, but K’ung continued as vice president and finance minister throughout the war. In autumn 1947, with communist victory on the Chinese mainland imminent, he moved to the United States and remained there, except for a brief period (1962–66) when he lived in Taiwan.